Moller v Minister for Immigration and Citizenship

[2007] FMCA 168

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MOLLER v MINISTER FOR IMMIGRATION & ANOR [2007] FMCA 168

MIGRATION – MRT decision – business (long stay) temporary visa as sponsored employee – approval of employer as standard business sponsor – visa applicant proposed to employ himself as sole trader – not permitted under Migration Regulations – no error by Tribunal when refusing approval.

Acts Interpretation Act 1901 (Cth), s.8

Business Names Act 1962 (NSW)

Judiciary Act 1903 (Cth), s.39B
Migration Act 1958 (Cth), s.483A, Pt.8
Migration Litigation Reform Act 2005 (Cth), Sch.1 cl.41
Migration Regulations 1994 (Cth), regs.1.03, 1.20(1), 1.20B, 1.20C, 1.20D, 1.20G, 1.20H, Sch.2 items 457.111(1), 457.223(4)

C H A Agencies v Minister for Immigration [2004] FMCA 279
Gulland v Federal Commissioner of Taxation (1983) 83 ATC 4352

Kim & Ors v Minister for Immigration & Anor [2007] FMCA 166

Lobo v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 132 FCR 93
Minister for Immigration & Multicultural & Indigenous Affairs v SGLB (2004) 207 ALR 12
Vishnumolakala v Minister for Immigration & Anor [2006] FMCA 1209
Wyse & Anor v Minister for Immigration & Anor [2006] FMCA 1362

Applicant: JAN CHRISTIAN MOLLER

First Respondent: MINISTER FOR IMMIGRATION & CITIZENSHIP

Second Respondent: MIGRATION REVIEW TRIBUNAL

File Number: SYG 2820 of 2005

Judgment of: Smith FM

Hearing date: 5 February 2007

Delivered at: Sydney

Delivered on: 28 February 2007

REPRESENTATION

Counsel for the Applicant: Mr B Zipser

Solicitors for the Applicant: Lewis Law Solicitors

Counsel for the First Respondent: Mr J A C Potts

Solicitors for the Respondents: DLA Phillips Fox

ORDERS

1. The application is dismissed. 

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2820 of 2005

JAN CHRISTIAN MOLLER

Applicant

And

MINISTER FOR IMMIGRATION & CITIZENSHIP

First Respondent

MIGRATION REVIEW TRIBUNAL

Second Respondent

REASONS FOR JUDGMENT

1. This is an application filed on 4 October 2005 under s.483A of the Migration Act 1958 (Cth) (“the Migration Act”), which seeks orders by way of judicial review of a decision of the Migration Review Tribunal (“the Tribunal”) made on 5 September 2005. The Tribunal affirmed a decision of a delegate made on 8 May 2004, which refused under reg.1.20D of the Migration Regulations 1994 (Cth) (“the Migration Regulations”) to grant approval of the applicant as a “standard business sponsor”.

2. The consequence of the decision of the delegate, as affirmed by the Tribunal, was that the applicant and his family members were unable to qualify for Class UC, subclass 457 temporary business (long stay) visas for which they had applied.  A later Tribunal decision was made on

   
   

   21 November 2005, and affirmed a second decision taken by the delegate on 8 May 2004, which refused their visa applications on the ground that the primary applicant did not have an approved business sponsor. 

3. The second Tribunal decision is the subject of another judicial review proceeding, SYG3798/2005, which was listed for hearing concurrently with the present application.  Counsel for the applicants in that matter also appeared for Mr Moller in the present matter.  He conceded that, if I dismissed the present application challenging the refusal of sponsorship approval, then the other application must also fail, since the Tribunal was undoubtedly correct that the applicants could not be granted visas in the absence of that approval.  Since, for reasons below, I propose to dismiss the present application, the application in SYG3798/2005 must also be dismissed.  A copy of this judgment will be placed on that file, to explain my reasons. 

4. The Migration Litigation Reform Act 2005 (Cth) repealed s.483A and restructured the Court’s jurisdiction in relation to migration decisions. However, these amendments apply only to proceedings commenced after 1 December 2005, and the repeal does not affect the present proceeding (see Sch.1 cl.41, and Acts Interpretation Act 1901 (Cth), s.8).

5. Section 483A gives the Court the jurisdiction of the Federal Court under s.39B of the Judiciary Act 1903 (Cth). This is subject to limitations under Part 8 of the Migration Act, which have the effect that that I cannot set aside the Tribunal decision and send the matter back unless I am satisfied that the decision was affected by jurisdictional error.

6. In the present case, the applicant argues that the Tribunal applied a material misconstruction of the relevant Migration Regulations when reaching its decision. It appears to be common ground that this would provide jurisdictional error if the Tribunal did make the error contended (cf. Lobo v Minister for Immigration & Multicultural & Indigenous Affairs (2003) 132 FCR 93 at [42]‑[62], and Minister for Immigration & Multicultural & Indigenous Affairs v SGLB (2004) 207 ALR 12 per Gummow and Hayne JJ at [51]).

7. Put shortly, the issue raised by the application for review concerns the interpretation of the criteria for approving a person as the employing sponsor of a visa applicant who is required to have such a sponsor.  The applicant presented himself both for approval as a sponsoring employer and also as the principal visa applicant, upon the basis that he proposed to take employment in a business which he conducted as its sole proprietor under a business name, “Electro Innovations”, which is registered under the Business Names Act 1962 (NSW). The Tribunal considered that the relevant regulations did not allow Mr Moller “to directly ‘sponsor’ himself” in a business conducted by him as an unincorporated sole trader.  For the reasons which follow, I consider that its reasoning reflected a correct interpretation of the regulations. 

The legislation 

1. At the time when the applicant’s visa and sponsor applications were made and considered, the Migration Act had been amended to contain special provisions in Division 3A concerning sponsorship as a criterion for prescribed visas, but neither counsel relied upon these provisions. I assume that they did not apply to the present application, since amending regulations to Division 1.4A, which applied Division 3A of the Act for the purposes of subclass 457 visas, did not commence operation until a later date. Both counsel addressed me on the basis that the relevant legislation could be found entirely within the Migration Regulations in their form consolidated as at 1 March 2004.

2. The substantive visa criteria to be satisfied at the time of decision for the category of subclass 457 visas for which the applicant sought to qualify were found in Sch.2 item 457.223(4).  This provided: 

   Sponsorship – Australian business 

   (4)The applicant meets the requirements of this subclause if:  

   (a)the activity in which the applicant proposes to be employed in Australia by a person (the employer) is the subject of an approved business nomination by the employer; and

   (b)the employer is: 

   (i)     either: 

   (A)a pre-qualified business sponsor; or

   (B)a standard business sponsor approved under regulation 1.20D as in force before, on or after 1 July 2003; and

   (ii)     the employer mentioned in subparagraph 1223A (3) (d) (i); and

   (c)the applicant is nominated, in accordance with approved form 1068, 1196 or 1196 (internet), in relation to the activity by the employer; and

   (d)the applicant has personal attributes and an employment background that are relevant to, and consistent with, the nature of the activity to be performed; and

   (e)the applicant demonstrates, if so required by the Minister, that he or she has the skills necessary to perform the activity; and

   (f)for an applicant in respect of whom there is a nomination of an activity under regulation 1.20G – the Minister is satisfied that: 

   (i)     the applicant will be paid at the level specified in the nomination; and

   (ii)     that level will be at least the minimum salary level that applied at the time the nomination was made; and

   (g)for an applicant in respect of whom there is a nomination of an activity under regulation 1.20GA – the Minister is satisfied that: 

   (i)     the applicant will be paid at the level specified in the nomination; and

   (ii)     that level will be not less than the level of remuneration provided for under relevant Australian legislation and awards; and

   (iii)   the applicant’s working conditions will be no less favourable than working conditions provided for under relevant Australian legislation and awards; and

   (h)for a standard business sponsor – the Minister is satisfied that the position to be filled by the applicant has not been created only for the purposes of securing the entry of the applicant to Australia. 

3. Various alternative categories of occupational qualification within subclass 457 are explained in the criteria found in other subclauses of item 457.223.  These covered visa applicants proposing to be employed in some other specially defined circumstances, and also in subclause (7) and (7A) an “independent executive” class of applicants proposing to develop or continue their own business activities for the benefit of Australia (cf. my discussion of this category in Wyse & Anor v Minister for Immigration & Anor [2006] FMCA 1362). For reasons which are unclear to me, the present applicant did not attempt to obtain qualification for a visa under the independent executive category, but sought only to qualify as a person sponsored by an approved employer under subclause (4).

4. To understand the legislative scheme reflected in this subclause, reference should be made to the following additional provisions: 

   a)The reference in the heading to item 457.223(4) to “sponsorship” and within the subclause to “sponsor” appears to invoke the definitions of those terms in reg.1.03.  These gave “sponsor” a meaning under reg.1.20(1), and “sponsorship” the meaning of “an undertaking of the kind referred to in regulation 1.20 to sponsor an applicant”.  Reg.1.20 set up a general scheme for “sponsors” to “undertake obligations” in relation to visa applicants, including by executing an approved form “after the Minister approves the person as a sponsor”.  The undertaking included, in relation to many classes of temporary visas which appear to include subclass 457 visas, “the sponsor accepts responsibility for:  

   (i)     all financial obligations to the Commonwealth incurred by the applicant arising out of the applicant’s stay in Australia; and

   (ii)     compliance by the applicant with all relevant legislation and awards in relation to any employment entered into by the applicant in Australia; and

   (iii)   unless the Minister otherwise decides, compliance by the applicant with the conditions under which the applicant was allowed to enter Australia. 

   b)The requirement in item 457.223(4)(b)(i)(B) that the visa applicant’s proposed employer should be “a standard business sponsor approved under regulation 1.20D”, invoked a scheme for giving such approval under Migration Regulations Div.1.4A. This required an application under reg.1.20C on an approved form for approval as a “standard business sponsor”. Such an application was required to be approved by the Minister under reg.1.20D, upon satisfaction of a range of criteria. These included under reg.1.20D(2)(a) that “the applicant for approval is actively and lawfully operating in Australia a business in which the employment of the holder of a Subclass 457 (Business (Long Stay)) visa would contribute to” various listed benefits to Australia, including “the creation or maintenance of employment for Australian citizens of Australian permanent residents”. Under reg.1.20D(2)(b) it was required that “the applicant for approval proposes to be the direct employer in Australia of the visa applicant as the holder of the visa”, or that a related corporation would be the direct employer. Under reg.1.20D(2)(d), it was required that “nothing adverse is known to Immigration about the business background” of the applicant for approval. Under reg.1.20D(2)(f), the applicant for approval was required “to comply with the undertakings given” in the form of application.  These included: accepting “responsibility for obligations to the Commonwealth” under taxation and superannuation law; complying with “Australian industrial relations laws; Australian levels of remuneration and conditions of employment”; and informing “DIMIA immediately if the sponsored person ceases to be in the business’s service”. 

   c)Further provisions in Div.1.4A were invoked by additional requirements: under item 457.223(4)(a) that “the activity in which the applicant proposes to be employed in Australia … is the subject of an approved business nomination by the employer”; under item 457.223(4)(c) that the applicant “is nominated … in relation to the activity by the employer”; and under item 457.223(4)(f) that “the applicant will be paid” at the level nominated and “at least the minimum salary level”.  These criteria are satisfied by the employer obtaining a further approval from the Minister.  Under reg.1.20G “a person who … is an approved standard business sponsor … may nominate to the Minister an activity in which an individual is proposed to be employed by the person in Australia”.  A nominated activity was required to be a Gazetted occupation, and the nomination was required to indicate that the visa applicant would be paid at least the Gazetted “minimum salary level”.  If all requirements were met in relation to the activity nomination, the Minister was required to approve the nomination under reg.1.20H. 

   d)The additional requirement under item 457.223(4)(b)(ii) that the proposed employer must be “the employer mentioned in subparagraph 1223A (3) (d) (i)” invoked a requirement of a valid visa application under that subparagraph in Sch.1 to the Migration Regulations, that it should “specify the employer by whom the applicant proposes to be employed for subclause 457.223 (4)”.  In effect, this “time of decision” criterion required that the visa applicant should still be proposing to be employed by the same employer proposed at the time of the visa application.  It was apparently inserted to prevent a visa applicant attempting to present a different employment proposal after applying for the visa.  The same policy is reflected in other legislative amendments which were discussed by me in Kim & Ors v Minister for Immigration & Anor [2007] FMCA 166.

Whether a visa applicant could sponsor himself for employment

1. Counsel for the applicant did not point to any of the provisions within item 457.223(4), or within the related regulations which I have identified above, as giving any indication that an employer who obtained approval to be a visa applicant’s “standard business sponsor” and was proposed as the employer of the visa applicant in an approved “nominated activity”, was intended to encompass the same person as the visa applicant himself or herself.  He accepted that the regulations appeared to be drafted upon an assumption that they would be different persons.  However, he argued that the regulations were capable of operating without requiring any separation of legal personalities, and submitted that a construction to allow this should be adopted. 

2. In support of this submission, he tendered parts of the Department’s Procedures and Advice Manual (‘PAM’) as it stood at the relevant time.  This might be capable of being read as suggesting that there could be “self sponsorship”, not only where a visa applicant had a proprietary interest or share in a proposed legally separate employing entity, but also where the visa applicant was a “sole trader … required to register [his] business name with the relevant State/Territory Government authority”.  

3. I have considered the extract from PAM, but have not found it to be of assistance when construing the regulations.  Its status is merely a set of administrative guidelines, and its contents cannot be elevated into legally relevant considerations or binding representations (see Vishnumolakala v Minister for Immigration & Anor [2006] FMCA 1209 at [27]‑[29] and cases there cited). Nor can its legal interpretations or restatements be applied by the Migration Review Tribunal or this Court as substitutes for the regulations, which must be construed according to their own language under principles of statutory interpretation (cf. Lobo (supra) at [63]‑[65]). The present PAM extract made no attempt to use the language of, or even to refer to, the relevant regulations, and gave no explanation as to how its author thought that its suggestions could be reconciled with the regulations. I do not consider that it contributes to the present question of interpretation.

4. Counsel for the applicant also sought support by referring me to a definition found in reg.1.20B and in Sch.2 item 457.111(1) that “person includes an unincorporated body of persons”.  He submitted that this extended definition would apply to the reference in item 457.223(4)(a) to the employer as “a person”.  Clearly, this is so.  He further argued that it would be consistent with allowing an employer to be an unincorporated “body of persons”, for an employer also to be the visa applicant alone in his capacity as a sole trader under a business name. 

5. However, counsel accepted that the language of the definition of “person” did not itself carry this effect.  I think this is correct, and that the definition does not assist the applicant.  Necessarily, a sole trader cannot be regarded as “a body of persons”, whether incorporated or unincorporated.  This is not the effect of registering a business name, which merely allows a trader to hold himself out in business in his personal capacity under a name other than his personal name. 

6. Counsel for the applicant’s further argument attempted to deal with the difficulty of comprehending how one person can be his own employee in any legal sense.  He accepted the correctness of a proposition stated, and explained with reference to authority, by Kennedy J in Gulland v Federal Commissioner of Taxation (1983) 83 ATC 4352 at 4,365:

   There appears to be no doubt that, putting on one side the case of a person’s acting in two capacities, one person cannot contract with himself, whether alone or jointly with another. 

7. He argued that in the present case a letter signed twice by Mr Moller on 21 March 2004 showed him contracting in different “capacities” to employ himself.  This letter is on the letterhead of the applicant’s business name “Electro Innovations”, is addressed to Mr Moller, and commences with the intriguing statement: “It is my pleasure to confirm my offer of employment to myself as a sole proprietor and my sponsorship and nomination of myself under the category of a 457 Temporary Residence Visa in Australia, valid for four (4) years and on the terms outlined below”.  It then sets out the terms of an offer of employment, covering salary, duties, obligations of confidentiality, termination (including dismissal for misconduct), and performance review.  

8. In my opinion, this is a situation which is clearly not within Kennedy J’s reference to a person contracting “in two capacities”.  By “capacities” is meant “legal capacities”, i.e. encompassing representational or derivative legal capacities which a person may exercise separately from their personal capacity.  As his Honour noted, a footnote to a reference in Halsbury’s Laws of England to a “power to contract in his representative capacity with himself as an individual” gives examples of the situation of a trustee, executor, administrator or agent.  In the case before Kennedy J, he found that an employment agreement by which Dr Gulland agreed to work in a medical practice owned and operated under a family trust structure was legally effective, notwithstanding that Dr Gulland had also executed the agreement as co-trustee. 

1. In the present case, I consider that Mr Moller’s agreement to employ himself cannot be brought within either the factual situation or the legal principles found by Kennedy J. 

2. Moreover, regardless of whether Mr Moller’s agreement should be regarded as a sham, or as ineffective legally for all purposes, I consider that it does not establish, nor illustrate, a situation intended to fall within the references in reg.1.20D and item 457.223 to a person who is an employer able to be approved to sponsor an employee and nominate a proposed activity for his or her employment.

3. In my opinion, the scheme and apparent intention of all the provisions which I have identified above, is that the employer and visa applicant must have separate legal personalities, so as to be legally capable of incurring the separate obligations, benefits and responsibilities of a sponsoring employer on one side and of an employee visa holder on the other. Since Mr Moller was incapable of entering into a legally meaningful contractual relationship with himself as to his own “employment”, I consider that he was incapable of satisfying the Minister in terms of the various requirements of reg.1.20D(2), including that “the applicant for approval proposes to be the direct employer in Australia of the visa applicant as the holder of the visa”. 

4. This conclusion does not require me to examine whether the references in the regulations to “employer” and “employment” encompass legal relationships in which work is performed which fall within the legal concept of a contract “for services” as distinct from “of service”.  However, I note that Phipps FM in C H A Agencies v Minister for Immigration [2004] FMCA 279 considered that the narrower construction should be preferred, based on the regulations’ reference to “direct employer” and other references suggesting that this category of visa is intended to be available only to persons intending to become true “employees” under a contract of service.  The indicators of this identified by Phipps FM at [21] of his judgment would tend, at least, to support the construction that the regulations intend that true legal relations must be capable of being undertaken between employer and employee, so as to exclude “sole-traders” proposing to employ themselves in an unincorporated business. 

The reasoning of the Tribunal was correct

1. The reasons of the Tribunal for affirming the decision to refuse approval to Mr Moller under reg.1.20D were given shortly:

   16.The evidence is that the review applicant and sponsor is Mr Jan Moller.  The business Electro Innovations is a business name only and is not a company.  Mr Moller therefore seeks to directly ‘sponsor’ himself. 

   17.The Tribunal does not accept that Mr Moller can be the direct employer of himself as the holder of the visa.  The associated Subclass 457 visa clearly draws a distinction between those who are intending to work in Australia as employees and those who intend to operate a business as a principal. The latter are dealt with as Independent Executives pursuant to subclause 457.223(7), which takes account of the nature of the individual’s contribution to overall management and running of the business and their ownership interest. Importantly, that form of entry does not require nomination of the individual. 

   18.The review applicant’s representative provided submissions dated 7 July 2005 which argued that a sole trader could nominate themselves and be the direct employer of themselves as a visa holder.  The submission indicated that relevant policy considerations recognised that ‘self-sponsors’ may be considered under the provisions of Subclass 457. 

   19.Nonetheless, in the Tribunal’s view, the requirement that the applicant for approval will be the direct employer of any associated Subclass 457 visa holder, requires that the person is remunerated as an employee of an entity (a person or company) and is not remunerated as a sole trader.  The Tribunal considers that the policy considerations are inconsistent with the regulation. 

   20.After considering the legislation, policy considerations and available evidence cumulatively, the Tribunal is not satisfied that the review applicant (the applicant for approval) proposes to be the direct employer in Australia of the visa applicant as the holder of the visa (the visa holder).  The Tribunal finds that the requirements of paragraph 1.20D(2)(b) are not met. 

2. In my opinion, this reasoning was consistent with the interpretation I have taken above.  I am not satisfied that it reveals any jurisdictional error, and therefore I must dismiss the application. 

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate:  Michael Abood

Date: 28 February 2007